China Trying To Blackmail Aussie farmers
- Australia has been at the forefront of the Campaign to hold China accountable for the spread of Wuhan virus. This has angered China no end. So, China has started a sort of a economic warfare to subdue Australia which has already witnessed its first recession in nearly 30 years. Its farm sector, with a large population, has seen confidence continue to slide with the spread of pandemic and downside in the international market.
China thinks that its mounting pressure on Aussie farmer products would bring in more weight on Canberra. However, it may not be sufficient enough for the Morrison administration to bow down to China and bring changes to its diplomatic policies.
According to the latest quarterly survey released by Rabobank on Monday, Aussie farmers’ confidence has continued a downward trend, from a nearly five-year record high at the beginning the year.
Among the respondents in South Australia, 42 percent are anticipating a worsening of business conditions in the coming 12 months, up from 19 percent in the previous quarter. The state of overseas markets proved the greatest concern, cited by 61 percent of the pessimistic farmers, the survey revealed.
The agricultural sector in Australia has been relying heavily on the international market, with nearly two-thirds of its products being exported. China, Australia’s largest trading partner, has been a top consumer of its agricultural products as well.
“Almost one in three export dollars to the [agriculture] industry is earned from China,” local news outlet ABC reported, citing Rabobank analyst Tim Hunt.
Despite the close ties between Aussie farmers and the Chinese market, Canberra has chosen to ignore the Chinese pressure. Although the Chinese market is crucial for Aussie farmers, the trading volume of the sector has accounted for a relatively small proportion of the entire bilateral trade, compared to iron ore.
With iron ore remaining as a major export of Australia to China, Canberra may further ignore the deteriorating prospect of its farm sector. In the past decades, it has enjoyed healthy growth alongside China’s rapid growth which generated surging demand for Aussie resources. However, the opportunity wouldn’t persist forever.
The overall bilateral trade remained robust during the first half of the year, but it has shown a sliding trend recently. Australia’s exports to China slumped by nearly a quarter year-on-year and a fifth month-on-month to reach 61.76 billion yuan ($9.04 billion) in August, according to statistics released by China’s General Administration of Customs.
And per data from the Australian Bureau of Statistics, Australia’s iron ore exports to China dropped 12 percent month-on-month in July, while China expanded imports of iron ore from India and Brazil during the same period.
The growth of the bilateral trade may keep dropping.
Now Australia must try and delink itself from the Chinese economy as fast as possible. It must build a stronger tie with India, Japan and ASEAN countries.
